The ratings agency dropped its investment-grade counterparty credit rating for the Omaha-based holding company and all the debt it guarantees by one notch to "AA" from "AA+." But all of Berkshire's insurance subsidiaries keep their "AA+" ratings.

S&P said Berkshire's insurance companies, which include Geico and major reinsurance firms like General Re, are riskier than other insurers because their large equity investments that can be volatile. And the ratings agency said insurance regulators could restrict how much money Berkshire's insurers send to the holding company.

The ratings agency also said management succession is a concern at Berkshire.

The 82-year-old Buffett has outlined the plan to replace him by splitting his job into three parts and Berkshire's board knows who the next CEO would be if Buffett died tonight. But neither Buffett's successor nor the two backup candidates have been publicly identified.

S&P said its rating reflects Berkshire's strong financial risk profile and strong balance sheet, and Berkshire still enjoys the highest rating of any insurance company.

Buffett did not immediately respond Thursday morning to a message about the ratings downgrade.

Buffett has said he's confident the investment decisions he makes for Berkshire won't jeopardize the company's future or cost him even a wink of sleep at night. Plus, he has said that Berkshire will always keep at least $20 billion cash on hand to cover any major disaster.

Andy Kilpatrick, the stockbroker-author of "Of Permanent Value, the Story of Warren Buffett," said he doesn't understand S&P's decision to reduce Berkshire's ratings at a time when the company is performing well and reports having $49 billion cash on hand.

"It seems to be a strange call because Berkshire just reported the best numbers it ever had," Kilpatrick said.

Earlier this month, Berkshire said its first-quarter profit soared 51 percent to $4.89 billion as its insurance companies enjoyed a quiet quarter and the value of its investments soared. Most of its operating businesses, including BNSF railroad and its manufacturing businesses, also performed well.

The outlook on all of S&P's ratings for Berkshire is negative. S&P said that outlook on Berkshire's ratings reflect the agency's "AA+" rating on U.S. government's debt, which affects U.S. financial services firms.

S&P said Berkshire's capital position could also be hurt if its insurance companies made a large acquisition or took on more investment risk.

Berkshire owns roughly 80 subsidiaries, including clothing, furniture and jewelry firms. Its insurance and utility businesses typically account for more than half of the company's net income. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.